Estimate how a user-entered constant annual inflation or deflation rate changes future costs, earlier-dollar equivalents, and purchasing power over time.
Inflation is a broad increase in prices over time. When prices rise, each dollar generally buys fewer goods and services, so nominal dollar amounts and purchasing power tell different stories.
This calculator compounds one annual rate for the selected duration. Real inflation varies from year to year, different households experience different effective inflation, and historical CPI-based calculations can differ materially from this constant-rate estimate.
Compounds the selected annual rate to estimate a future equivalent price.
Future cost = Current amount × (1 + inflation rate)^yearsDiscounts an amount to estimate its earlier-dollar equivalent under the same constant-rate assumption.
Past equivalent = Current amount ÷ (1 + inflation rate)^yearsEstimates how much of today's purchasing power remains after cumulative inflation.
Remaining purchasing power = Starting amount ÷ (1 + inflation rate)^yearsWith $1,000, 3% annual inflation, and 10 years, the estimated future equivalent cost is $1,343.92. That is a $343.92, or 34.39%, increase. The purchasing power of the original $1,000 after 10 years is approximately $744.09 in today's dollars.
Compare lower and higher assumptions because even small annual-rate changes compound over long periods.
A future equivalent price rises with inflation while the purchasing power of an unchanged dollar amount falls.
A negative input models prices decreasing at a constant annual rate; sustained economy-wide deflation is not a typical assumption.
A constant-rate estimate is useful for scenarios, but a calculation based on actual historical CPI observations may be more appropriate for comparing specific past years.
If income or savings remains unchanged while prices rise, the same amount purchases less. For example, at 3% annual inflation, cumulative price growth over 10 years is about 34.39%, while $1,000 retains about $744.09 of today's purchasing power.
A positive rate raises projected prices and reduces the purchasing power of an unchanged amount. A negative rate represents deflation: projected prices fall and the same nominal amount gains purchasing power. The calculator excludes rates of -100% or lower because the compounding base would be zero or negative.
The entered rate is held constant and compounded once per year. Actual inflation is uneven, household spending patterns differ, and individual categories such as housing, food, healthcare, or energy may move differently from a broad price index.
It estimates how a constant annual rate changes an amount, future price, earlier-dollar equivalent, or purchasing power over a chosen period.
No. Actual inflation changes over time. A constant rate is a simplifying scenario assumption, not a forecast of annual inflation.
If the dollar amount stays fixed while general prices increase, that amount can purchase fewer goods and services.
Yes. Enter a negative annual rate greater than -100%. The result is labeled as a deflation assumption.
No. This version uses only the annual rate you enter and does not fetch or interpolate historical CPI observations.
Households buy different mixes of goods and services, so changes in housing, transportation, food, healthcare, and other costs affect them differently.
The entered amount is divided by one plus the annual inflation rate, compounded for the selected number of years.
Nominal value is the stated dollar amount. Real purchasing power expresses what that amount can buy relative to a reference period.
Background sources explaining inflation measurement and purchasing power.